The antifraud provisions of the Securities Act of 1933 and Securities Exchange Act of 1934 may apply to securities sold exclusively to nonresident aliens. The extraterritorial application of these provisions is allowed only when United States Courts have subject matter jurisdiction over the transaction under principles of international law. Case law examines the relationship among four variables to determine whether United States Courts will assert or deny jurisdiction. This Article proposes a matrix model that uses these four variables to assist in the determination of jurisdiction. The matrix model is a tool which clarifies the variables involved in the jurisdictional analysis and the different legal standards which are used when the court has identified which matrix combination is involved. It also proposes a standard nomenclature to aid in the analysis. The author concludes that the jurisdictional sufficiency of conduct and effect (two variables) is directly related to the nationality and residence of the litigants (the other two variables).
Marc H. Morgenstern,
Extraterritorial Application of United States Securities Law: A Matrix Analysis,
7 Hastings Int'l & Comp. L. Rev. 1
Available at: https://repository.uchastings.edu/hastings_international_comparative_law_review/vol7/iss1/1